On December 31,2011,XYZ Inc

question 72

Multiple Choice

On December 31,2011,XYZ Inc.has an account receivable of $2,000 for consulting fees it earned during the year.Consulting revenues are only taxable when collected.XYZ normally receives payment for the services rendered one month after the client is invoiced.Assuming a 20% tax rate,these revenues shall result in:

• A)a deferred tax asset of $400.
• B)a deferred tax liability of $400.
• C)a deferred tax asset of $2,000.
• D)a deferred tax liability of $2,000.

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Definitions:

Illegal

Activities or actions that are prohibited by law and subject to penalties.

Predatory Pricing

Charging a very low price for a product with the intent of driving competitors out of business.

Deceptive Pricing

A misleading business practice where the price advertised is not fully transparent, leading consumers to believe they are paying less than the actual cost.

Price Discrimination

A pricing strategy where a company charges different prices for the same product or service based on various criteria like customer location, purchasing power, or quantity bought.